Another delayed rule for Obamacare

But don't worry. This particular rule is already 3 years overdue. What's another year among friends?


The Obama administration is delaying enforcement of a provision of the new healthcare law that prohibits employers from providing better health benefits to top executives than to other employees, the New York Times reported on Saturday.

Tax officials said they would not enforce the provision this year because they had yet to issue regulations for employers to follow, according to the Times.

Internal Revenue Service spokesman Bruce Friedland said employers would not have to comply until the agency issued regulations or other guidance, the newspaper reported.

The IRS was not immediately available to confirm the Times story.

The rollout of the Affordable Care Act, known as Obamacare, has been marked by a number of delays in implementing certain parts of the law. In November, the administration announced a one-year delay in online insurance enrollment for small businesses.

Technical problems with the enrollment website plagued its launch on October 1, but they have largely been fixed and more than 2 million people have signed up for private insurance. The White House hopes to have 7 million people sign up by March 31, the deadline for coverage under Obamacare.

The law, adopted in 2010, says employer-sponsored health plans must not discriminate "in favor of highly compensated individuals" with respect to either eligibility or benefits.

So what's the problem? The IRS can't figure out how to regulate concepts like "highly compensated":

IRS officials said they were wrestling with complicated questions like how to measure the value of employee health benefits, how to define "highly compensated" and what exactly constitutes discrimination, the Times reported.

The ban on discriminatory health benefits was to take effect in 2010. Administration officials said then that they needed more time to develop rules and that the rules would be issued well before this month, when other major provisions of the law took effect. 

Three years and they still can't figure it out? This is what happens when government sticks its nose into the most complicated aspects of private business - compensating executives. Every company is different in this regard, which makes the task of regulating corporate pay and benefits a fool's errand. It just doesn't lend itself to a one size fits all regulation.

But never fear, the IRS will find a way. And eventually,  they will successfully add to the paperwork burden of American business.

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